Banks don’t get a tax break on foreclosed homes they own, according to IRS. Ownership expenses for the houses must be capitalized, the Service says in a memo to field agents. Many banks have big inventories of homes they’ve acquired via foreclosure. Since these homes will be sold off in the ordinary course of business, the bank is treated as a reseller of real estate that is subject to the capitalization rules. Affected expenses include legal fees for foreclosures, realty taxes, insurance, repairs, utilities and administrative costs for the department handling the foreclosed homes.